Throughout American history, almost every generation has had substantially more education than that of its parents.
That is no longer true.
When baby boomers born in 1955 reached age 30, they had about two years more schooling than their parents, according to Harvard University economists Claudia Goldin and Lawrence Katz, who have calculated the average years of schooling for native-born Americans back to 1876. In contrast, when Americans born in 1980 turned 30 in 2010, they averaged about eight months more schooling than their parents.
This development already has broad ramifications across the U.S. job market: Those with only a high-school diploma had an 8% unemployment rate in March, roughly double that of college graduates, who had a 4.2% unemployment rate. Workers with bachelor’s degrees earn 45% more in wages on average than those of demographically similar high-school graduates. And in today’s highly automated factories, many manufacturers demand the equivalent of a community-college degree, even for entry level workers.
More serious consequences may be felt in the future. Without better educated Americans, economists say, the U.S. won’t be able to maintain high-wage jobs and rising living standards in a competitive global economy. Increasingly, the goods and services in which the U.S. has an edge rely more on the minds of American workers—than on their muscle. “The wealth of nations is no longer in resources. It’s no longer in physical capital. It’s in human capital,” says Ms. Goldin.
The reasons American education levels are no longer increasing as they once did are numerous: Despite years of effort, high-school dropout rates remain stubbornly high. College tuition is rising and the prospect of shouldering heavy debt discourages some high-school graduates from enrolling in college or sticking with it.
There is also growing skepticism among some Americans about whether a college degree actually translates into a well-paying job. Particularly during the recent recession, there have been gluts of college graduates in some industries and shortages in others.
Extending the extra-low interest rate on student loans has become a hot issue in the presidential campaign, but the impact of such a proposal would be small, some academics and economists say. For instance, the typical worker with a bachelor’s degree in petroleum engineering earned $120,000 a year and those with a degree in math and computer science earned $98,000, according to 2010 census data analyzed by Georgetown University’s Center on Education and the Workforce. In contrast, the median worker with a degree in counseling psychology earned just $29,000 and those with degrees in early childhood education earned $36,000.
"Not all bachelor’s degrees are the same," Georgetown University’s Center on Education and the Workforce said in an extensive analysis issued last year. "While going to college is undoubtedly a wise decision, what you take while you’re there matters a lot, too."
Mary Brown, 25, of Woodland Hills, Calif., saw friends who finished college with massive debts and were unable to find jobs in their fields, if at all. She took a different approach, earning an associate degree and a certificate in massage therapy from Anthem Career College in Nashville, Tenn. “I wanted a college that taught me how to do the work, but didn’t make me pay to take a lot of other classes in subjects that are irrelevant to my career,” she says.
In contrast, her mother, Irena Tolliver, has a bachelor’s in elementary education and a master’s in reading education. When Ms. Tolliver was growing up, her parents, Belarussian immigrants, told her to “take advantage of the great educational resources that were available,” Ms. Tolliver recalls. “That’s what America was all about to them.” But Ms. Brown feels differently. After graduating, she landed a $20-an-hour job at a Rockford, Ill., spa, then moved to California but was unable to find a massage-therapy job. So she recently moved back to Illinois. All but about $5,000 of the $21,000 she borrowed for her 18-month program has been paid back. “I was working in a career I loved, making a pretty good living, while a lot of my friends were in college and not loving it so much,” she says. “Now they are facing tons of debt and I don’t have to worry about that.”
Ms. Brown isn’t unique. Among Americans who turned 25 in the 1970s, only 5% had less education than the parent of the same sex, according to an analysis by Michael Hout and Alexander Janus, sociologists at the University of California, Berkeley. Among those who turned 25 in the 2000s, 18% of men and 13% of women had fewer years of school than their parents.
There is a limit to how much schooling a person can get and to how many Americans have both the ability and interest in a four-year college degree. But the U.S. is nowhere near that point. Twenty countries have higher high-school graduation rates than the U.S.—including Slovenia, Finland, Japan, the U.K. and South Korea, according to the Organization for Economic Cooperation and Development. In the U.S., about one in five ninth-graders drop out before getting a diploma.
From the Wall Street Jourmal